Question-and-Answer Session
Operator
(Operator Instructions) Michael Nathanson, Sanford Berstein.
Michael Nathanson - Sanford C. Berstein
Thanks. I have one for Tom. It’s about the parks and the cost base. I wonder if you can talk a bit about what the split of the cost base is between fixed and variable now and has that changed over the years. And as you talked before about you’re good at managing through different economic environments, what type of revenue slowdown can you absorb before perhaps it would be impact and what can you do on a cost base to absorb that slowdown if there was a slowdown?
Thomas O. Staggs
Well, as you know, our business at the parks has evolved over time and while we haven’t given out a specific percentage, it would be difficult to do so as to what is fixed and what is variable. It’s important to know that we do have considerable leeway to add costs based on demand or to take costs out based on a lack thereof, and so as you’ve seen as recently as 2001, we’ll adjust park hours. We’ll adjust rooms that we make available. We’ll adjust number of entertainment offerings, et cetera, so that the -- while there is clearly a fairly large fixed cost base in parks, we do have the ability to dial up and down our costs.
Having said that, back to your point about the evolution of the business, I think it is important to note that we’ve added both size and scope in the business. Our vacation club business has turned out to be very resistant to downturns. Our cruise business frankly is significantly stronger right now than it was this time last year and has shown itself to be very resilient through any economic conditions, so that -- we’re more excited than ever about having two new ships coming on.
We are building out our international base and seeing the improvement in Paris and the improvement in Hong Kong I think bodes well for further broadening this base of business at the parks.
And I think Bob had noted just on the last call that we find that people tend to cancel a planned vacation infrequently, very infrequently, and so as I said on the call in the prepared remarks, the pace of business to us looks pretty good. We feel like we’ve got the ability to respond if necessary but right now, we’re feeling pretty optimistic about where things go from here.
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